Hasbro 2014 Annual Report Download - page 105

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
The Company has a master agreement with each of its counterparties that allows for the netting of
outstanding forward contracts. The fair values of the Company’s foreign currency forward contracts designated
as cash flow hedges are recorded in the consolidated balance sheet at December 28, 2014 and December 29, 2013
as follows:
2014 2013
Prepaid expenses and other current assets
Unrealized gains .................................................. $46,594 1,088
Unrealized losses ................................................. (11,508) (702)
Net unrealized gain ................................................ $35,086 386
Other assets
Unrealized gains .................................................. $34,234 —
Unrealized losses ................................................. (172) —
Net unrealized gain ................................................ $34,062 —
Accrued liabilities
Unrealized gains .................................................. $ 447 3,425
Unrealized losses ................................................. (725) (13,671)
Net unrealized loss ................................................ $ (278) (10,246)
Other liabilities
Unrealized gains .................................................. $ — —
Unrealized losses ................................................. — (2,070)
Net unrealized loss ................................................ $ — (2,070)
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings
to net earnings for the years ended December 28, 2014, December 29, 2013 and December 30, 2012 as follows:
2014 2013 2012
Consolidated Statements of Operations Classification
Cost of sales ............................................... $ 973 1,523 9,644
Royalties .................................................. (2,028) (1,096) 1,845
Sales ..................................................... (3,741) 3,585 (2,633)
Net realized (losses) gains .................................... $(4,796) 4,012 8,856
In addition, net gains (losses) of $62, $164 and $(94) were reclassified to earnings as a result of hedge
ineffectiveness in 2014, 2013 and 2012, respectively.
During the fourth quarter of 2013, the Company entered into forward-starting interest rate swap agreements
with total notional value of $300,000 to hedge the variability of the anticipated underlying U.S. Treasury interest
rate associated with the expected issuance of long-term debt to refinance the 6.125% Notes Due 2014 with a
principal of $425,000. These derivative instruments were designated and effective as cash flow hedges. An
unrealized gain of $3,172 related to these instruments was recorded to prepaid expenses and other current assets
at December 29, 2013. During the first quarter of 2014, the notional amounts of the Company’s forward-starting
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